BASF's quarterly operating profit edged 2 percent higher, relying again on strong basic petrochemicals and oil businesses to offset a drop in earnings from specialty materials such as vitamins and engineering plastics.
While first-quarter earnings before interest and tax (EBIT), adjusted for one-offs, of 2.51 billion euros ($3.01 billion) were in line with market estimates, earnings from more complex and customised products missed expectations. These businesses, the group's designated growth drivers, have been squeezed by higher raw materials prices. BASF has predicted an improvement over the course of the year but Friday's results could rekindle a debate over its strategy, as the company's head of technology, Martin Brudermueller, takes over as chief executive later on Friday.
BASF said it was still aiming for an increase of up to 10 percent in group operating profit this year. On Thursday, it agreed with Solenis to combine their paper and water chemicals businesses, creating an entity with pro-forma sales of 2.4 billion euros ($2.88 billion). BASF has embarked on an organisational revamp. It has agreed to spend billions on agricultural seed assets from peer Bayer and it is also planning to merge its oil and gas division with rival DEA and float it on the stock exchange.
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